Bank of America Profit Drop: Will mortgage rates be effected by banks reporting profit loses?

  • Yes, mortgage rates will be affected by bank losses of profit.

    This is the way of business; when banks lose money, they must retrieve it. They do this in multiple ways, but raising mortgage rates is one of the primary ways. The good part is that there is competition. By having other businesses that will offer home financing, it creates competition which will keep rates from climbing out of reach.

  • Yes, profit losses will affect mortgage rates.

    Yes, I believe that reports of profit losses by banks will have an affect on mortgage rates. One can assume that hearing of profit losses will decrease the public opinion of banks, probably in a negative way. Loss of trust in banks will, perhaps, lead to a decline in usage of that particular bank, and the bank will be obliged to adjust its mortgage rate accordingly.

  • Bank Profitablity Has Little to do With Current Rates

    The government has been manipulating interest rates for many years now. Mortgage rates are a reflection of the interest charged by the fed. Mortgage interest rates have been artificially reduced and are not a true reflection of profit and/or risk. The rates must increase at some point, but this increase will only occur after the fed has chosen to do so.

  • No, there is too much competition.

    Any effect on mortgage rates from a bank's financial losses is minimal. Trade in mortgage-backed securities, fed funding rates, and overall trends in the housing and credit markets are catalysts for major moves. A bank has too much competition for home loans to significantly adjust its loan rates after a bad quarter.

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